Inflation dipped to 3.1 per cent in September easing pressure on the Bank of England to hike interest rates - but businesses warned there is worse to come.
The headline CPI rate was down slightly from the 3.2 per cent recorded in August, despite analysts' expectations it would hold steady.
The figure will give the Bank of England pause for thought amid a growing clamour for a rate rise as soon as next month to stop prices getting out of control.
However, the Office for National Statistics stressed that the downward shift was partly due to the effects of the government's Eat Out to Help Out discounts unwinding 12 months before.
The British Chambers of Commerce said a 'renewed inflationary surge' is still looming, with the Bank expecting the level to top 4 per cent this year - more than double its target.
Industry chiefs warned MPs yesterday that cafe and pub prices are up 18 per cent annually and petrol nearly 23 per cent.
But in interviews this morning, Business Secretary Kwasi Kwarteng urged calm on the inflation threat. 'I am confident it will be contained. But we will have to wait and see,' he told BBC Breakfast.
Chancellor Rishi Sunak said: 'Global shocks have pushed up prices around the world, and we are working with businesses and international partners to address these pressures.
'We are supporting people with the cost of living, including through a new £500m support fund to help vulnerable households, the energy price cap, and assistance with energy bills through the winter.'
The headline CPI rate was down slightly from the 3.2 per cent recorded in August, despite analysts' expectations it would hold steady
Food and Drink Federation chief executive Ian Wright warned ministers to 'think seriously' about the inflation caused by supply-chain disruption
Mike Hardie, head of prices at the ONS, said: 'Annual inflation fell back a little in September due to the unwinding effect of last year's Eat Out to Help Out, which was a factor in pushing up the rate in August.
'However, this was partially offset by most other categories, including price rises for furniture and household goods, and food prices falling more slowly than this time last year.
'The costs of goods produced by factories rose again, with metals and machinery showing a notable price rise.
'Road freight costs for UK businesses also continued to rise across the summer.'
Average petrol prices stood at 134.9 pence per litre in September 2021, compared with 113.3 pence per litre a year earlier, as fuel provided an upward pressure on inflation, the ONS said.
Suren Thiru, Head of Economics at the British Chambers of Commerce, said: 'September's dip in inflation reflects temporary data distortions rather than the reality on the ground.
'The slowdown was largely due to strong base effects caused by dining out costing less last month in comparison with September 2020, when prices increased following the end
